In this episode of the Close The Deal Podcast, Kathryn Porritt explains why the middle market is becoming harder for businesses to compete in and why many companies must either move downmarket or reposition themselves as premium brands.  She discusses how luxury positioning works, why innovation and uniqueness drive premium pricing, and how entrepreneurs can identify what they do best in the world and build a brand around it.

Why competing on price is destroying your margins

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The Commodity Trap Most Businesses Fall Into

When markets tighten, many business owners react the same way: they lower prices.

It feels logical. Competition increases, demand softens, and suddenly everyone is racing to the bottom. But according to luxury brand strategist Kathryn Porritt, that strategy may actually be the most dangerous move a business can make.

The middle market — where most companies operate — has become increasingly difficult to compete in. Businesses are squeezed between low-cost competitors on one side and premium brands on the other.

And the reality is simple.

You either move down… or you move up.

The Middle Market Is Getting Squeezed

For decades, many companies built their businesses by serving the middle of the market. Good product. Fair price. Solid service.

But that model is under pressure today.

Low-cost operators and global marketplaces have driven prices down. At the same time, premium brands are commanding stronger loyalty and higher margins.

The result?

The middle ground is disappearing.

Businesses that once thrived in that space now find themselves competing on price — often without realizing they’ve become commodities.

How Luxury Brands Actually Grow

Most entrepreneurs believe successful brands grow from the bottom up.

You start small. Build an audience. Increase demand. Then scale.

That’s how many large companies operate.

But luxury brands follow a completely different strategy.

They start at the top.

Instead of building scale first, they establish authority, exclusivity, and innovation at the highest level of the market. Only later do they expand into broader products and services.

Think about the fashion industry.

High-end designers begin by creating exclusive pieces for elite clients. Over time, that brand equity allows them to expand into ready-to-wear products, fragrances, and accessories.

Scale happens — but it happens downward.

Luxury Is About Innovation, Not Price

One of the biggest misconceptions about luxury is that it simply means charging more.

That’s not what drives premium demand.

Luxury customers aren’t paying for price.

They’re paying for innovation, rarity, creativity, and mastery.

They want the most advanced, the most original, or the most refined version of something.

And that applies across industries — not just fashion or luxury goods.

Even a commodity industry like seafood can transform through innovation.

The Shrimp Story That Proves the Point

During the conversation, Ewell Smith shared a powerful example from the Gulf Coast shrimp industry.

Shrimp is traditionally treated as a commodity product.

Most fishermen sell their catch for whatever the market price happens to be.

But one shrimper took a completely different approach.

Instead of competing on price, he innovated. He flash-froze shrimp immediately after catching them, preserving flavor and quality at the highest possible level.

Then he positioned the product differently.

He sold directly to top chefs and premium retailers.

Instead of selling shrimp for under a dollar per pound like the rest of the industry, his product commanded premium prices.

Same product category.

Completely different positioning.

Finding Your True Competitive Advantage

The first step toward premium positioning isn’t pricing.

It’s clarity.

Businesses must identify what they do better than anyone else in their market.

Not just what they offer. But where they are truly exceptional.

This often takes deep analysis, reflection, and research.

Once that unique advantage is clear, the next step becomes much easier: positioning that mastery to the right audience.

Selling the Vision Instead of the Pain

Traditional sales strategies often focus on pain points.

Find the problem. Agitate the problem. Sell the solution.

Luxury markets operate differently.

Yes, the need must exist. But the real driver of premium decisions is vision.

Customers invest because they see a future possibility they hadn’t previously imagined.

The role of the seller becomes helping them see that vision clearly.

When that happens, pricing becomes far less important.

The Strategic Shift Many Businesses Need

For entrepreneurs who feel trapped in price competition, the idea of moving upmarket can feel risky.

But in many cases, it’s the only path to sustainable margins.

Luxury positioning doesn’t require abandoning your expertise.

It requires redefining how the market sees it.

Because somewhere in every industry — even commodity industries — there is always a premium segment waiting for someone to lead it.

Episode Summary

In this episode of the Close The Deal Podcast, Kathryn Porritt explains why the middle market is becoming harder for businesses to compete in and why many companies must either move downmarket or reposition themselves as premium brands. She discusses how luxury positioning works, why innovation and uniqueness drive premium pricing, and how entrepreneurs can identify what they do best in the world and build a brand around it.

Key Questions This Episode Answers

• How can entrepreneurs reposition their product or service as a luxury offering?
• Why is the middle market becoming increasingly difficult to compete in?
• What makes a luxury brand different from a premium priced product?
• How do businesses escape commodity markets and improve margins?
• What role does innovation play in luxury brand positioning?

Top Kathryn Porritt Mindset Quotes:

“The middle market has collapsed.”

“Luxury brands descend into scale.”

“You must be exceptional at what you do.”

“Innovation drives premium pricing.”

“Pricing becomes irrelevant when vision is clear.”

Frequently Asked Questions